The Status of Crypto currency in Islamic Law: A Research Evaluation in Perspective of the Principles of Buying and selling in Hanafi Jurisprudence

کرپٹو کرنسی کی شرعی حیثیت: فقہِ حنفی کے اصولِ بیع و شرا کے تناظر میں ایک تحقیقی جائزہ

Abstract

Crypto currency is a modern digital financial concept in which transactions are made through block chain technology instead of a central institution. It is an intangible asset that has no physical existence. Basically, it is a complete decentralized system that is not connected to a central server. Crypto currency comes into existence through the modern technology “cryptography”. Accordingly, it is called crypto currency. This technology is based on block-chain technology. At the time of writing, there are approximately 23,000 different crypto currencies in existence. Some of them are coins and some are tokens. The principles of Hanafi jurisprudence show that in Sharia, physical presence, ownership, and actual possession are essential for a sale between the buyer and the seller. Since crypto currency does not meet these conditions, most Hanafi scholars call it a “false sale.” According to the scholars, crypto currency is neither a price, nor is ownership proven on it, nor is it subject to the seller. Therefore, buying and selling crypto currency is not permissible according to Sharia. However, since new things are added to the customs of life with the change of time, the party that says that if crypto currency acquires the status of a credit price in common usage and the Sharia principles (equal quantity, possession of both parties, etc.) apply to its exchange, it is possible to consider it as customary money and make it permissible like a sale currency. And this is possible when the government of the time gives it legal status under its patronage and allows transactions to be made through it.